Cannabis Wheaton Income acquires RockGarden Medicinals for $27.8M

Cannabis Wheaton Income Corp. dba Wheaton Income (TSX-V: CBW) has acquired all of the issued and outstanding shares of RockGarden Medicinals (2014) Inc. in an all-stock transaction.

Carleton Place, Ontario based RockGarden Medicinals is a privately owned licensed producer of cannabis pursuant to the ACMPR. On August 25, 2017 RockGarden Medicinals was granted a cultivation license.

Shareholders of RockGarden Medicinals are entitled to receive aggregate consideration of up to 27,499,912 common shares in the capital of Wheaton Income: 17,499,970 shares upon closing of the acquisition; 4,999,971 shares issued and held in escrow to be released upon RockGarden Medicinals receiving a sales authorization under the license; and 4,999,971 shares issued and held in escrow to be released upon certain key employees satisfying certain performance obligations set out in the share purchase agreement.

Cannabis Wheaton Income stock closed at $1.01 on October 31, 2017, valuing the transaction at up to $27.8 million.

RockGarden Medicinals had previously launched in August 2017 a $8.2 million financing with a $17.7 million pre-money valuation, to expand its current production facility in Carleton Place, Ontario.

Stoic Advisory Inc. acted as financial advisor to RockGarden Medicinals in the completion of the acquisition.

Wheaton Income said the acquisition furthers its streaming platform strategy by providing the company additional resources and regulatory tools to help accelerate Wheaton Licensing Program participants’ pathway to licensing under the Access to Cannabis for Medical Purposes Regulations (ACMPR).

Hugo Alves, President of Wheaton Income commented, “When we set the strategy for Wheaton Income it was about building a dynamic platform that promoted sustainable growth for both the industry and our shareholders. The acquisition of RockGarden will act as a strategic tool to help us with on-going partnerships and opportunities, but most importantly the development and execution of our existing and prospective streaming relationships.”

Chuck Rifici, Chief Executive Officer of Wheaton Income stated, “I couldn’t be happier to work with RockGarden — whom I and the entire Wheaton Income team believe has tremendous pedigree well suited to succeed in a legal regulated environment. As much as this is a strategic acquisition, it is also a cultural acquisition for us. We pride ourselves on building valuable, ethical and long-standing relationships within the industry and are excited to welcome the incredible RockGarden team to the Wheaton Income family. It’s a winning combination as the industry moves forward and becomes continually more competitive. This acquisition represents another way that the Wheaton Income platform drives Growth by Diversity.”

“RockGarden management and shareholders are thrilled to join the Wheaton family. Cannabis Wheaton’s all-star team has both industry-leading experience and financial acumen which are key requirements to becoming a national leader in the cannabis industry. We are proud to be an important part of that success,” stated Deborah Hanscom, Chief Executive Officer of RockGarden.

Vlad Klacar, Associate General Counsel and the primary mentor to the Wheaton Licensing Program said, “In addition to acquiring an excellent facility and a fantastic team, the RockGarden acquisition provides the Wheaton Licensing Program with a regulatory tool that will accelerate the development of our Wheaton Licensing Program participants and provide an expedited pathway for incredible entrepreneurs to participate in the regulated cannabis industry. Stay tuned for more news on this front in the coming weeks.”

photo credit: RockGarden Medicinals